Property Management News
Increasing the Rent

 “Property owners should also keep in mind that raising rent may not always be an easy option.”Like everything else the rental is very much influenced by the basic economic principal of supply and demand. Greater demand for rental properties will ultimately see an increase in rent; however, demand is variable from area to area so you should consult with your Property Investment Manager on whether your area is in high rental demand and due a rental increase. 

 

 

 

 

Property owners should also keep in mind that raising rent may not always be an easy option. Generally the rent can only be increased after the fixed term of the agreement has expired. In NSW the tenant must be given 60 days notice in writing. If sent out by post an additional four working days must be added to the amount of notice to allow for delivery. For a rent increase to take place during a fixed term tenancy there must be an additional term in the tenancy agreement.   

If the rental market is experiencing low demand, maybe due to an influx of rental properties available, then it may be advisable to maintain the rent rather than raise it, as you may lose your tenant and see your property vacant for a period, ultimately losing your income.

However, there are other ways a landlord can ensure their property stands out from the competition thereby justifying rental increases even in an oversupplied market.

The first place to start is the presentation of your property. Being seen to offer something extra over your competitors through immaculate presentation will provide an ‘added value’ to your property.

Keeping the premises looking new by applying a fresh coat of paint or getting the carpets steam cleaned, will make a great deal of difference to the overall appeal of the home. Adding a security door or landscaping the front garden with some warm colourful plants to complement the spring season, or even installing a larger hot water system, are all possible ways that could justify an increase in the rent.

For the more adventurous, you may decide to undertake a total refurbishment, including improvements such as, replacing the carpets, installing a new bathroom or kitchen. These may elevate the price bracket of your property, but be careful not to get carried away and overcapitalise. Overcapitalising can cause loss of profits when the costs of improvements outweigh the returns gained.

Whatever you decide to do to maximise the return from your investment, a good starting point is to consult with your L.J. Hooker Property Investment Manager.

Turning Your Holiday into an Investment With todays’ increased work demands the desire to get away from it all is stronger than ever.  Noticeably people are tending to holiday in the same location year after year, as they familiarise themselves with the areas that appeal to them – be it a lazy seaside town or a fast paced city.    

 

 

 

 

If you find yourself revisiting a particular spot and feel your visits could be an ongoing thing, you may want to consider purchasing a property in the area, effectively turning your holiday into an investment.

Whether you choose to invest in a holiday house located in a small seaside town or a high-rise apartment in the centre of the city you need to consider the pros and cons from an investment perspective.

You may find the perfect beach house in a sleepy coastal town that is affordable, but remember there is the possibility that such an investment is seasonal and you could find your investment empty for much of the year and only in demand during the summer months – just when you want to use it!

Conversely, an investment in a high-rise unit or townhouse in a more popular location may attract higher rents and lower vacancy rates, but will probably cost you more money up-front.

If you are comfortable with leasing out your holiday property for the majority of the year, then you would be wise to consider a property that is relatively maintenance free, with modest furnishings, thus reduce the possibility of damage by the tenants. You should also try to look for property in a popular location or one that retains unique features, to ensure it appeals to holiday renters.  

 

 

 

 

 

 In the Real World      The following is a summary of a legal judgement arising from a tenancy dispute.  It is important to remember that this is a summary and for a full account the entire judgement should be read.  We do not recommend you rely on this summary in any decision making about your investment property.

 Cribb v Everdell (2005) NSWCTTT 584 (18 August 2005)     This case is a good example of the benefits of using a professional property investment manager to engage and supervise qualified tradespeople to handle repairs to your investment property.

The tenant in this case sought compensation from the landlord in respect of loss and damage suffered by her following repairs carried out at the premises. The premises were damaged by a vehicle and repairs were arranged by the landlord while the applicant was in Queensland. The tenant gave evidence that while carrying out these repairs the tradespeople had turned off the power and failed to turn it back on again. As a result all perishable goods in the deep freeze were destroyed. Also the tradespeople used the tenant’s vacuum cleaner without a dust bag and broke it. The tradespeople also broke into the premises through a slightly open front window so they could access power. They left the window open and removed the fly screen. Later the house was broken into and then tenant’s mobile phone stolen.

The landlord argued that the tenant did not leave the house secure (the window being slightly open) and that they were not responsible for the trades peoples actions, as these particular tradespeople were organised by their insurer.

The Tribunal found that the landlord had an obligation to supervise the tradespeople and is responsible for the consequences of their having turned off the power and for their use of the vacuum cleaner.  An amount of $ 369.50 was allowed for the goods destroyed in the deep freeze and $ 149.00 for the vacuum cleaner. An allowance of $ 50.00 was also allowed for the electrical power used by the tradespeople.

In answer to the question of the subsequent break in and theft of the tenant’s mobile phone, the Tribunal found that the tradespeople entered the premises without authorisation and by leaving the fly screen off and the window open they had made it more likely that the premises would be entered by the third party who took the phone. The second hand cost of the phone was allowed.

A professional property investment manager has access to a stable of qualified and reputable tradespeople to assist landlords in the repair and maintenance of their properties.

Disclaimer: This newsletter has been prepared by L.J. Hooker.  Every effort has been made to ensure the contents are accurate at the time of publication

L.J. Hooker takes no responsibility for any subsequent action that may arise from the use of this newsletter.